charles seaford growth commissioner
EU Growth Commissioner: mandate to promote quality growth

An interesting idea has been put forward recently for the creation of a new ‘Growth’ Commissioner at the European Commission. What would be the point?

There are already Commissioners for competition, industry and entrepreneurship, economic and monetary affairs, the internal market, trade, regional policy, and employment, so it would be reasonable to roll your eyes and ask what a new Growth Commissioner could achieve?

Equally, plenty of people will wonder whether policy in this area can and should be made at European as opposed to national or even city level. Perhaps the answer to these questions lies precisely in this multiplicity of roles.

It is now widely agreed – certainly on the left but also by some on the centre right – that the central economic objective for European countries is not just ‘growth’ but ‘good growth.’ That means firstly growth resulting in ‘good’ jobs (decent pay and conditions, job security, acceptable working hours and so on), and secondly growth that is compatible with the transition to a sustainable regional and global economy: no-one will win if we propel ourselves over a cliff at top speed.

But targeting ‘good growth’ requires an integrated approach to policy making (this was one of the findings of an EU funded research project we were involved in and presented at a conference at the OECD last month). This is in contrast to the traditional, siloed approach to policy which involves setting a number of objectives and forming separate organisations to pursue those goals (although there can be special task-forces to deal with one-off cross-cutting issues).

Such aims might include growth, deficit reduction, stability, regional balance, social protection, environmental protection and so on. Sometimes there is a synergy between these objectives (‘green growth’ for example) and then all is well.

More often, however, there is a trade-off and the outcome depends on a negotiation between the organisations involved – and thus on the relative power of those organisations. There is no particular reason why this should lead to the optimal outcome: the distribution of power does not always match the relative contribution of different objectives to human welfare.

This is particularly the case in Europe, where the negotiation is somewhat insulated from those democratic pressures which in theory encourage this match. But even in fully democratic institutions, a traditional economic view of the world predominates, shaped by the need to keep capital markets on side, and influenced by the assumption, despite everything that has happened in the last 6 years, that isolated interventions are sufficient to make markets work effectively.

The result is that the only real battle in town is between deficit reduction and GDP growth. Other objectives are pursued but are not, as it were, at the top table. This makes ‘good growth’ hard to achieve.

So how might one achieve this integrated approach? After all joined up government has been an elusive objective for rulers ever since Edward I’s Wardrobe (his private finance department) engaged in disputes with the Exchequer. It is particularly difficult in the Commission, given the rigidities inherent in a treaty based organisation.

This is where a Growth Commissioner comes in – with a mandate to promote not just the quantity but the quality of growth. This would involve a policy assessment function: For example, is this policy contributing to good growth?

Good growth would then need to be enshrined in a revised set of Europe 2020 objectives. Perhaps more important, it would require the generation of policy ideas to create good growth, drawing on a wider range of expertise and perspectives than is typically available within conventional economic departments.

These diverse perspectives – from business, foreign affairs, psychology and strategy – would help the Commission escape the institutional and intellectual straightjacket that arguably has led to a prolonged crisis, particularly in southern Europe. How to make such a role effective within the Commission structures will require much work of course.

Charles Seaford is Head of the Centre for Wellbeing at the New Economics Foundation. This article represents his personal views.

A EU Growth Commissioner to Drive Good Quality Growth
Share this:
Tagged on: